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How Did The Great Depression Affect The Economy

1980 Words8 Pages

Following World War I, the United States emerged as the world’s largest economic power, and along with this great prosperity came great propensity for great changes in society, which led to the decade known as the Roaring Twenties. During the 1920s, a new form of the American economy emerged which emphasized extremely high rates of consumption. The public began to buy as much as possible. Assisting this system was a concept known as installment buying that allowed people to acquire an expensive commodity, perhaps a new automobile or radio, and pay for it over months and months, in small amounts each time. Along with the increase in prosperity and consumption came a vast increase of popularity of the stock market. Before the 1920s, only the …show more content…

Furthermore, they bought farms from those too poor to own them. As a result of this investment, these methods of production continued to flourish, even if no one could buy them. Americans continued to starve, but not because food did not abound. Even if the Great Depression economically affected different income groups proportionally, the realistic impact told a different story. The top 10% of the US population by income continued to earn the same share of the total national income both before and during the depression. However, this statistic alone ignores the reality of that statement. The wealthy still had wealth, but the lower class went from having little wealth to threadbare none. Essentially, the upper class still invested in means of production that made them wealthy, but very few shared in the wealth. Due to lack of government involvement, a high tariff causing international isolation, and a circular economy that continued to put money in the pockets of those least impacted by the hard times, the Great Depression lasted a decade. Because of its extreme longevity (compared to most severe recessions), the Great Depression had a lasting impact on the United

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